What the Supreme Court Ruling Means for Online Shopping in Your State

Amazon has been paying sales tax in the 45 states that charge it, but that hasn't been the case for many other online retailers, or even some of the sellers in Amazon's marketplace. That's about to change. The Supreme Court ruled June 21 that states can impose sales taxes on out-of-state retailers, including those that don't have a physical presence in the state. Judging by the state sales tax rates compiled by the Tax Foundation and the estimated revenues from new ecommerce taxation put forth by the Government Accountability Office, states would be able to collect $8 billion to $13 billion more in sales tax than in 2017. Half would come from marketplace sellers on Amazon, eBay, Etsy, and similar sites. Based on information from the Tax Foundation and the GAO, here is the impact of that court decision once all states enact ecommerce tax laws of their own.

Combined state and local sales tax: 9.1 percent
A total of 37 states, including Alabama, have local taxes in addition to state taxes. With Alabama applying sales tax to everything but prescription drugs, the state's ecommerce revenue depends largely on how effective local taxes are and how much it can reap from a previously unenforced 2015 law requiring out-of-state retailers who made $250,000 or more in sales to Alabama residents annually to collect and remit sales tax. The GAO estimates potential revenue of between $156 million and $238 million.

State sales tax: Zero percent
Alaska is one of five states with no statewide sales tax. It allows local governments to set sales taxes of their own, but it remains to be seen how local jurisdictions will apply or enforce ecommerce taxes.

Combined state and local sales tax: 8.33 percent
Amazon paid Arizona more than $50 million in 2012 to settle unpaid taxes. But the GAO stays the state stands to make between $190 million and $293 million by applying its ecommerce tax laws to all sellers.

Combined state and local sales tax: 9.41 percent
This is particularly delightful for Arkansas, which tried to force Amazon to pay sales tax in 2011. Amazon responded by terminating the contracts of its affiliates in Arkansas and not collecting sales taxes until 2017. Now Arkansas stands to bring in an extra $123 million to $169 million, according to the GAO.

Combined state and local sales tax: 8.54 percent
According to the GAO, 85 percent of large online retailers and 19 percent of small retailers with just one location had stores in or collected income taxes for California. But this extremely populous state would rake in $1 billion to $1.7 billion by forcing out-of-state retailers to collect sales tax.

Combined state and local sales tax: 7.52 percent
Colorado has been waiting for this. It enacted a law requiring retailers who do not collect taxes on sales to Colorado customers to tell customers about their tax obligations and report customers' purchases to the state revenue agency each year. The GAO says Colorado will be selective about sending notices to taxpayers directly, but expects to make $123 million to $169 million in new revenue.

Combined state and local sales tax: 6.35 percent
Amazon started collecting sales taxes from Connecticut customers in 2013, but will rake in even more revenue if it starts applying its ecommerce tax laws more broadly. The GAO estimates that Connecticut stands to gain $128 million to $194 million from improved sales tax collection.

Combined state and local sales tax: Zero percent
The only new money Delaware is getting from a Supreme Court decision this year is sports gambling revenue. It has no sales tax, and folks in this state like it that way.

Combined state and local sales tax: 6.8 percent
The GAO notes that since Florida doesn't have much of an income tax, any new revenue it gets from other sources is key to its well being. In this case, Florida would get between $486 million and $758 million from taxing out-of-state ecommerce sites.

Combined state and local sales tax: 7.15 percent
Georgia's state income tax is only 4 percent, so it's going to be up to local governments to go chasing ecommerce sites for the rest. If they need incentive, the GAO says enforcement of state and local sales taxes would bring Georgia between $232 million and $367 million more from ecommerce alone.

Combined state and local sales tax: 4.35 percent
The cost of shipping items from the mainland may seem like a good explanation for Hawaii getting just $36 million to $51 million in new ecommerce revenue from this Supreme Court decision. But as the GAO points out, Hawaii's population and the fact that it taxes companies on business-to-business goods and services results in a smaller windfall.

Combined state and local sales tax: 6.03 percent
Idaho started collecting state sales tax from Amazon only last year. But its relatively small population caps any potential new tax revenue from online shopping at between $42 million and $60 million.

Combined state and local sales tax: 8.70 percent
Ecommerce is this state's new Magnificent Mile. While a 2011 ecommerce law not only pushed online retailers out of the state, but was declared unconstitutional in 2013, the Supreme Court ruling beefs up the state's 2015 ecommerce law and, according to the GAO, should bring in between $383 million and $626 million more in sales tax.

Combined state and local sales tax: 7 percent
Amazon has been collecting sales taxes here since 2014, but it also has a number of distribution centers in the state and was required to do so under a 1992 Supreme Court ruling. Now, with out-of-state sites forced to collect as well, the GAO says Indiana stands to bring in another $168 million to $261 million in sales tax.

Combined state and local sales tax: 6.80 percent
Amazon started collecting sales tax here just last year, but Iowa taxes only prepared food, non-prescription drugs, and clothing. That said, the clotheshorses of Iowa should bring the state an extra $104 million to $146 million in sales tax from out-of-state sites, according to the GAO.

Combined state and local sales tax: 8.68 percent
Amazon opened a distribution center here in 1999, but only began collecting Kansas sales tax in 2005. While Kansas has been weighing a law similar to Colorado's that would notify Kansas shoppers of their sales tax liability for out-of-state sites, going after the sites themselves would, according to the GAO, bring Kansas an extra $113 million to $170 million.

Combined state and local sales tax: 6 percent
Similar to Kansas, Kentucky has had an Amazon distribution center since 1999 and has collected sales taxes from the company since 2005. But the GAO notes that Kentucky's relatively low sales tax and lack of local sales taxes should limit potential new revenue from out-of-state sites to between $93 million and $140 million.

Combined state and local sales tax: 10.02 percent
With average local sales tax (5.02 percent) exceeding the state sales tax (5 percent), Louisiana shoppers pay the highest combined sales tax in the country. Certain local shoppers pay sales tax of up to 12 percent. Like Colorado, it has a law on the books requiring out-of-state ecommerce retailers to report sales to Louisiana customers. With that hefty combined tax rate, all of that sales-tax reporting should result in $195 million to $288 million more in revenue, according to the GAO.

Combined state and local sales tax: 5.50 percent
Maine is an excellent example of why asking consumers to report their own sales tax burden is destined to fail. The state has the highest rate of such reporting in the nation, yet the GAO says only 10.2 percent of all taxpayers report that "consumer use tax" on their returns. This fact, coupled with a lack of local sales tax and a relatively low population, should cap Maine's returns from expanded out-of-state ecommerce sales tax at between $28 million and $41 million.

Combined state and local sales tax: 6 percent
Maryland has been collecting taxes from Amazon since 2014, but only because it opened a facility in Baltimore. Since Maryland doesn't enforce sales tax collection from out-of-state ecommerce sites, the GAO estimates that the state could bring in an extra $165 million to $252 million once it gets new laws on the books.

Combined state and local sales tax: 6.25 percent
Sorry to disappoint the cranks who call it "Taxachusetts," but Massachusetts taxes prepared food and non-prescription drugs but restricts it on clothing to purchases of more than $175. With no local sales taxes, Massachusetts' combined sales tax ranks 35th in the country. Still, it applies to enough items and is paid by enough consumers that forcing out-of-state online retailers to collect sales tax would bring in between $169 million and $279 million, according to the GAO, even with the state's annual online sales exemption of $500,000.

Combined state and local sales tax: 6 percent
Another state that ranks among the Top 20 in state sales tax but the bottom 20 in combined sales tax, Michigan has no local sales taxes. Though it has been collecting sales taxes from Amazon since 2015, Amazon has a presence in the state. Its out-of-state marketplace sellers could now help bring Michigan an extra $221 million to $336 million in sales tax revenue.

Combined state and local sales tax: 7.42 percent
In 2015, Minnesota commissioned a study to find out if taxpayers would report the sales taxes owed from purchases on out-of-state ecommerce sites. They found that self-reporting ranged from 10.2 percent of Maine taxpayers to just 0.2 percent of their Rhode Island counterparts. But Minnesota is one of only two states with a law requiring emarketplace companies to collect sales taxes on behalf of the sellers using their marketplace. That foresight should bring in an extra $132 million to $206 million almost immediately.

Combined state and local sales tax: 7.07 percent
Mississippi applies sales tax to just about everything you can buy, while allowing local governments to tack up to 1 percent more onto the bill at their discretion. The fight to impose sales tax on online businesses, however, has been ugly. The word "unconstitutional" was thrown around, but Amazon already collects state sales taxes. A bit of political will could bring in $90 million to $123 million more.

Combined state and local sales tax: 8.03 percent
While Amazon pays sales tax here, it pays only the 4.225 percent charged by the state. Local taxes average another 3.8 percent, but go into the 5 percent range. Missouri asks taxpayers to report sales taxes paid to out-of-state ecommerce site, but the GAO says a more proactive approach would result in an extra $180 million to $275 million in the state treasury.

Combined state and local sales tax: Zero percent
There is sales tax in certain resort areas, but online shoppers shouldn't fear. In Big Sky Country, the sky is the limit for tax-free online spending.

Combined state and local sales tax: 6.89 percent
An extra $67 million to $95 million might be couch change to Omaha's Berkshire Hathaway billionaire Warren Buffett, but it's no small deal to some of Nebraska's communities. With local sales tax as high as 2 percent, that extra out-of-state ecommerce money would help immediately.

Combined state and local sales tax: 8.14 percent
Nevada has no income tax and is having its casino and sports-betting revenue attacked by gambling-hungry states across the country. It started collecting taxes from Amazon in 2014, but isn't so far removed from the housing crisis that it would turn down an extra $87 million to $134 million in sales tax from out of state.

Combined state and local sales tax: Zero percent
Unlike the rest of New England, New Hampshire won't be affected by this Supreme Court decision. The "Live Free or Die State" likes to live sales-tax free as well.

Combined state and local sales tax: 6.6 percent
New Jersey helped force the Supreme Court to allow it to take sports bets. In a state with high property taxes and an unrelenting hunger for revenue, the extra $216 million to $351 million that the GAO estimates it could collect from out-of-state sites shouldn't elude it for long.

Combined state and local sales tax: 7.66 percent
Amazon started paying the state's 5 percent sales tax only last year, but has ignored local sales taxes. And with a state sales tax that ranks just 32nd in the nation, New Mexico can expect only $60 million to $88 million in extra revenue from out-of-state ecommerce retailers.

Combined state and local sales tax: 8.49 percent
New York state is notorious for tracking down every tax dollar it can. If an out-of-state ecommerce retailer even advertises on an in-state retailer's site, a 2008 state law declared that those ads entitle New York to some sales tax. With 85 percent of large online retailers and 12 percent of small ones having a presence in New York, the state was already getting substantial ecommerce sales tax. But by closing the out-of-state loophole, New York will be able to bring in another $510 million to $880 million.

Combined state and local sales tax: 6.95 percent
Amazon has been collecting a state sales tax here since 2014, but of just 4.75 percent. Should North Carolina go after out-of-state sites and encourage local communities to pursue online sales taxes, the GAO says they could bring in an extra $223 million to $358 million.

Combined state and local sales tax: 6.80 percent
The recently overturned Supreme Court decision from 1992, Quill v. North Dakota, determined that a state could collect sales tax from an ecommerce site only if it had a presence in the state, and only 55 percent percent of large ecommerce retailers either had a presence in the state or collected state income tax. Even with North Dakota's low population and 5 percent state sales tax, the GAO estimated that cost the state $34 million to $49 million in sales taxes last year alone.

Combined state and local sales tax: 7.15 percent
Amazon didn't start collecting sales tax in Ohio until it opened data centers in Columbus in 2015. But with Ohio taxing sales and shipping and handling charges, the GAO estimates that it could bring in an additional $288 million to $456 million by collecting sales tax from out-of-state ecommerce.

Combined state and local sales tax: 8.91 percent
The state's 4.5 percent sales tax is among the lowest in the land, but combine it with local sales taxes and it suddenly ranks No. 6 in the nation. Oklahoma started collecting sales tax from Amazon and other online retailers only last year, but the GAO says it could have brought in $157 million to $228 million more by applying its ecommerce laws to out-of-state sites as well.

Combined state and local sales tax: Zero percent
It's right next door to Amazon's home state and has Amazon facilities within its own borders, but Oregon doesn't require Amazon or any other retailer to collect sales tax. While Washington can lord its lack of income tax over its neighbor to the south, it can't just jump the border and dodge sales tax on ecommerce as it can with bricks-and-mortar retailers.

Combined state and local sales tax: 6.34 percent
The good news is that the GAO says Pennsylvania could get $219 million to $373 million more in sales-tax revenue if it pressured out-of-state online retailers. The bad news, at least for the state treasury, is that clothing (and imitation furs and athletic apparel) is still exempt.

Combined state and local sales tax: 7 percent
Rhode Island found out the hard way that just 0.2 percent of its taxpayers would report owing sales tax on items bought online through out-of-state sites. While it finally got Amazon to collect sales taxes last year after nearly eight years of fighting, Rhode Island still stands to bring in $123 million to $169 million more from other out-of-state ecommerce sites.

Combined state and local sales tax: 7.37 percent
South Carolina didn't always believe in collecting sales taxes from ecommerce companies. In 2011, it rejected a five-year exemption for Amazon — which planned a distribution center there — but settled on making South Carolina shoppers responsible for their own online sales taxes. In 2016, however, it forced Amazon and other retailers to collect the tax. Doing the same for out-of-state ecommerce sites would bring in between $132 million and $193 million, according to the GAO.

Combined state and local sales tax: 6.4 percent
What is $33 million to $47 million in extra sales worth to South Dakota? Apparently, a trip to the Supreme Court to overturn Quill v. North Dakota. South Dakota doesn't collect income tax, so it had no problem going after out-of-state ecommerce in 2016 and fighting for its right to collect sales tax from online home goods retailer Wayfair in the highest court in the land.

Combined state and local sales tax: 9.46 percent
Tennessee's 7 percent state sales tax is the second-highest in the country, primarily because the Volunteer State prefers not to impose an income tax. As a result, the GAO estimates that it could bring in another $237 million and $363 million in sales tax from out-of-state ecommerce.

Combined state and local sales tax: 8.17 percent
When one of the biggest states in the country doesn't impose income tax, just about any boost in sales tax will have a huge impact. In Texas' case, collecting more sales tax from online retailers beyond its borders will yield $763 million to $1.2 billion in additional revenue. Texas forgave nearly $270 million of Amazon's back taxes in 2012 before forcing the company to collect state sales tax, but it will be starting fresh with most out-of-state ecommerce sites.

Combined state and local sales tax: 6.77 percent
Amazon started collecting Utah sales tax only last year — and only through a confidential deal with the state. That secrecy, coupled with Utah's relatively low population, leads the GAO to believe that sales-tax revenue from out-of-state ecommerce would yield between $73 million and $113 million.

Combined state and local sales tax: 6.18 percent
It's a growing but still tiny state without a whole lot of buying power. But it does require ecommerce sites with sales of more than $100,000 to report sales within the state, which means it's well prepared to extract the extra $16 million to $23 million the GAO say it's entitled to from out-of-state sites.

Combined state and local sales tax: 5.63 percent
Even with local sales tax factored in, Virginia's sales tax ranks among the Bottom 10 in the nation. It's also been collecting state sales taxes from Amazon for the past five years. But the GAO notes that sheer size of its online consumer base will enable it to pry $188 million to $298 million in additional sales tax from out-of-state sites.

Combined state and local sales tax: 9.18 percent
Washington has no income tax and has Amazon headquarters right in its backyard: It knows a thing or two about making ecommerce companies pay sales tax. The GAO says Washington collects more than half of its revenue and already requires out-of-state ecommerce sites to report Washington-based sales. It also has a law in place requiring all ecommerce sites to collect state sales tax from individual sellers in their marketplaces. That law will help Washington rake in between $298 million and $453 million in sales tax from out-of-state ecommerce sites this year.

Combined state and local sales tax: 6.37 percent
West Virginia has collected state sales tax from Amazon since 2013, but that tax is capped at 6 percent. Even if local sales taxes of up to 1 percent are factored in, the GAO says West Virginia stands to bring in only $53 million to $74 million in additional sales tax from out-of-state sites.

Combined state and local sales tax: 5.42 percent
Wisconsin has collected its 5 percent sales tax from Amazon since 2013, just before Amazon opened a distribution center in the state. But with an undefined policy toward out-of-state ecommerce, Wisconsin will rake in an extra $123 million to $187 million with new regulation, according to the GAO.

Combined state and local sales tax: 5.456 percent
Wyoming has a smaller population than most major U.S. cities, but that's no excuse for less than 55 percent of all major ecommerce sites to collect its sales tax. It's why, in 2017, the state adopted a law requiring any ecommerce site conducting more than 200 transactions a year there to collect state sales tax. According to the GAO, that move will bring the state another $22 million to $31 million in sale tax from out-of-state sites.